The Great Britain pound advanced against the euro today after talks among European Union finance ministers failed, increasing the appeal of the sterling as a refuge from the European crisis. The currency remained weak versus the US dollar.
Traders were hoping that yesterday’s meeting will show willingness of European politicians to work together for solving the region’s problems. Instead, the failed talks just confirmed that Europe’s leaders are unable to act decisively when it is needed. Moody’s Investors Service downgraded France’s credit rating to Aa1 from Aaa and kept the outlook negative on Monday. The sterling profited from the resulting risk aversion sentiment, but gains were limited as fundamentals in the United Kingdom itself are not supportive for the currency.
GBP/USD declined from 1.5923 to 1.5911 as of 10:12 GMT today, while its daily minimum was at 1.5880. EUR/GBP ticked down from 0.8046 to 0.8029.
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